PMLA provisions cannot become ED's tools, says SC in Balaji's bail order

The Supreme Court on Thursday said constitutional courts cannot allow provisions of the Prevention of Money Laundering Act to become instruments in the hands of the Enforcement Directorate to continue incarceration for a long time.

The top court said when the trial of the complaint under PMLA is likely to prolong beyond reasonable limits, the constitutional courts will have to consider exercising their powers to grant bail.

"The reason is that section 45(1)(ii) (of PMLA) does not confer power on the State to detain an accused for an unreasonably long time, especially when there is no possibility of trial concluding within a reasonable time.

"What a reasonable time is will depend on the provisions under which the accused is being tried and other factors. One of the most relevant factors is the duration of the minimum and maximum sentence for the offence," a bench of Justices Abhay S Oka and Augustine George Masih said.

The observations of the apex court came while granting bail to former Tamil Nadu minister and DMK strongman Senthil Balaji in a money laundering case.

Observing that inordinate delay in the conclusion of the trial and the higher threshold for the grant of bail cannot go together, the apex court said it is a well-settled principle of the country's criminal jurisprudence that "bail is the rule, and jail is the exception".

"These stringent provisions regarding the grant of bail, such as Section 45(1)(iii) of the PMLA, cannot become a tool which can be used to incarcerate the accused without trial for an unreasonably long time," it said.

The top court said another important consideration is the higher threshold or stringent conditions which a statute provides for the grant of bail.

Even an outer limit provided by the relevant law for the completion of the trial, if any, is also a factor to be considered, it said.

Referring to its judgment in KA Najeeb case, the top court said the extraordinary powers can only be exercised by the constitutional courts.

"The judges of the constitutional courts have vast experience. Based on the facts on record, if the judges conclude that there is no possibility of a trial concluding in a reasonable time, the power of granting bail can always be exercised by the constitutional courts on the grounds of violation of Part III of the Constitution of India notwithstanding the statutory provisions," the bench said.

The top court said constitutional courts can always exercise its jurisdiction under Article 32 or Article 226, as the case may be.

The constitutional courts have to bear in mind while dealing with the cases under the PMLA that except in a few exceptional cases, the maximum sentence can be of seven years, the bench said.

"The constitutional courts cannot allow provisions like section 45(1)(ii) to become instruments in the hands of the ED to continue incarceration for a long time when there is no possibility of a trial of the scheduled offence and the PMLA offence concluding within a reasonable time.

"If the constitutional courts do not exercise their jurisdiction in such cases, the rights of the undertrials under Article 21 of the Constitution of India will be defeated. In a given case, if an undue delay in the disposal of the trial of scheduled offences or disposal of trial under the PMLA can be substantially attributed to the accused, the constitutional courts can always decline to exercise jurisdiction to issue prerogative writs," the bench said.

The top court said some day, the courts, especially the constitutional courts, will have to take a call on a peculiar situation that arises in the justice delivery system.

"There are cases where clean acquittal is granted by the criminal courts to the accused after very long incarceration as an undertrial.  When we say clean acquittal, we are excluding the cases where the witnesses have turned hostile or there is a bona fide defective investigation.

"In such cases of clean acquittal, crucial years in the life of the accused are lost. In a given case, it may amount to violation of rights of the accused under Article 21 of the Constitution which may give rise to a claim for compensation," the bench said.